Teardown.com: Amazon Brings Fire to Phone Market

Preliminary Teardown analysis suggests that Amazon's $649.00 phone costs $209.00 to build. Qualcomm is the primary provider of many of the key integrated circuits, and both Invensense and OmniVision are noted for their role in delivering Amazon's Dynamic Perspective display technology.

Based on our analysis and costing, this phone is on par with many competitors from a technology design and premium pricing perspective. The phone's price (and bill of materials cost) is in-line with competitors like the Samsung Galaxy S5 and the Apple iPhone 5S.

Amazon has undoubtedly invested heavily in software features that are not included in this BOM costing estimate, most notably the software behind the Dynamic Perspective display feature. To understand the inner workings of the hardware needed to support this new feature, Teardown.com looks inside at the design and chipsets needed to enable this high-performance phone and the new experience it promises the mobile phone market.

Amazon's Fire Phone enters the mobile market from AT&T (a similar strategy applied by Apple in 2007) and through direct sales via Amazon.com. Just like the first iPhone, and those that have followed since, the Teardown.com team has wasted no time analyzing the Fire Phone to discern what choices the vendor made from a design, technology, assembly, and chipset perspective to bring its flagship device to market.

But before we jumped into the Fire Phone we had to test the Dynamic Perspective feature. While it is true the Dynamic Perspective cannot really be viewed in a still photo of the display, our teardown team did their best to capture photos of the hardware, which delivers the 3D-like experience.

Dynamic Perspective
Click on the photo below to see images 1-5 of Fire Phone's Dynamic Perspective.

Into the Fire Phone -- design wins
From a hardware and chipset perspective the Amazon Fire is no slouch. Teardown.com’s team was encouraged to see that the design choices used to enable many of the features needed to compete in a connected world were chosen from a stable of many vendors’ premium product lines.

At the heart of the Fire Phone is Qualcomm's Snapdragon 800 Application and Baseband processor running at 2.2 GHz with 2 GB of LDDR3 RAM; this includes 32 GB of storage, support for LTE (as well as GSM and W-CDMA cellular modes), and WiFi 802.11a/n/ac. Teardown.com notes Qualcomm scored big in the design wins in the Amazon Fire Phone besting Broadcom in the combo WiFi chip space.

The following table captures a complete list of the key integrated circuit design wins in the Amazon Fire Phone.

Oh may be you are right, but this will not be the strategy of a multinational company to earn profits, all the other giants are also having the same pricing strategies. This is because we are comparing it with Xiaomi it look too much price difference. But if you compare it with any other product from the electronic giants then the price difference is not that huge as such.

I think that Amazon may be providing the library of Kindle supported books free along with this tablet. Need to check that, that may be the only reason of high cost. Besides the better software facilities.

Also, don't forget the additional costs in manufacturing. Yield and startup costs can be high at the beginning. It is good to see that Amazon will have a profit from selling this hardware, unlike the tablets. They do need some profit for the bottom line.

>> However, what i do not understand in most of the teardowns is the hidden cost estimates that are not considered so that the owner know the true value of the device.

This is a guidance, I will say. If Amazon places an order for 10 million chips, the price will be different when it is buying say only 1 million units. The expert is providing a guidance and we thank them for that. It cannot be hard science until you know the quantity and discount from the firm.

>> I am sure Amazon is going after the recurring revenue coming from video and product selling from Fire instead of from selling the phone.

That is the business model. The question is why they have to make the hardware expensive to execute that. In the past, they subsidize the hardware to enable the evolution of the monetization of the contents.